Property Midterm Flashcards

Question

Rowe v. A&P Common Law

Answer 1

Where a lease is silent, the general rule is that a tenant is free to transfer/sublease/assign. In limited circumstances, the court may find an implied prohibition, but only if LL would be deprived of the benefit of his bargain based on the special skills of the tenant (Rowe/Nassau Hotel):

Answer 2

Did the tenant possess a special skill or ability which would have material impact on LL’s expectations? Would a reasonable person enter into the contract without assurance that tenant could not be replaced? Is it a regular lease with minimum monthly base rent?

Answer 3

LL may refuse consent even if arbitrary or unreasonable

Answer 4

If lease explicitly requires consent, but doesn’t set standard for denial of consent, can LL unreasonably withhold consent?)

Answer 5

If lease is silent as to the standard for consent, LL must be commercially reasonable Restatement: LL cannot unreasonably withhold consent, unless a freely negotiated provision gives LL such right

Answer 6

If a landlord consents to any assignment, it has impliedly consented to all subsequent assignments Parties can negate the implied rule with an express statement in the lease

Answer 7

Unless a greater right is conferred by lease, T cannot assign without written consent (RESIDENTIAL ONLY) If LL is reasonable, T is not released, and T can’t assign If LL unreasonable, T is released from lease, but no assignment When dwelling has 4 or more units, LL may not unreasonably withhold consent Note that NY RPL 226-b is a mandatory minimum. LL may confer greater rights in the lease, but cannot provide tenant with less

Answer 8

One who has become legally liable for the debt, default or failure in duty of another

Answer 9

When a secondary obligor is bound to pay for the debt or answer for the default of the principal/primary obligor to the obligee (creditor), the secondary obligor is said to have surety status Rooted in equity, the purpose of the subrogation doctrine is to afford a person who pays a debt that is owed primarily by someone else who “ought to” pay every opportunity to be reimbursed in full

Answer 10

Is self-help an available remedy to a landlord who believes the tenant has violated the lease?

Answer 11

:1) LL must be legally entitled to possession (a) holdover tenant; or (b) breach of lease AND lease contains a re-entry clause; and (2) re-entry must be peaceable. T may recover damages for wrongful eviction if either (i) LL not entitled to possession; or (ii) not peaceable Note: Even under the common law rule, under the facts in Berg v. Wiley, where tenant was not present when LL changed the locks, reentry was not peaceable. Broadly speaking, self-help is never available

Answer 12

Self-help is wrong as a matter of law, and the only lawful means to dispossess a tenant who has not abandoned nor voluntarily surrendered but who claims possession adversely to a landlord’s claim of breach of a written lease is by resort to judicial process (summary dispossession)

Answer 13

(If tenant abandons possession, does LL have a duty to mitigate?)

Answer 14

A landlord does not have a duty to mitigate its damages after a tenant’s abandonment of the premises and subsequent eviction. Once a lease is executed, the tenant’s obligation to pay rent is fixed according to the lease’s terms. A landlord has no obligation to the tenant to minimize damages by finding, or even attempting to find, a replacement tenant for abandoned premises. (Holy Properties)

Answer 15

A landlord has a duty to mitigate damages by making a reasonable effort to re-let the premises when seeking to recover rent from a defaulting tenant. Such a duty is consistent with basic justice and fairness. (Kridel)

Answer 16

imposes a duty to mitigate for residential leases only

Answer 17

Implied in every lease is a covenant that the tenant shall have use of the property. This Covenant of Quiet Enjoyment is breached where: A Third Party with paramount title, claiming by or through under the landlord, ousts T The LL wrongfully evicts and/or forces T off premise (e.g., self-help; Berg v. Wiley)

Answer 18

Tenant is in possession; and Is thereafter dispossessed; By LL, or third party claiming by, through or under LL with superior title

Answer 19

When LL actions or omissions render premises substantially unsuitable for purpose for which they are leased or which seriously interferes with beneficial enjoyment it is a breach of the covenant of quiet enjoyment and constitutes constructive eviction

Answer 20

May a tenant avoid payment of rent by claiming constructive eviction and vacating the premises?

Answer 21

Any wrongful act or omission by LL, third party claiming by, through or under LL with superior title; OR another third party with superior legal title which renders premises Either: Substantially unsuitable for the purpose for which they are leased; OR Seriously interferes with beneficial enjoyment of the premises; AND Tenant thereafter abandons

Answer 22

Should the court adopt an implied covenant of habitability? If yes, is a tenant entitled to a return of rents paid for prevailing on a claim for breach of implied covenant of habitability?)

Answer 23

Implied warranty requiring that rental premises be offered and maintained in a physical condition that provides safe, decent, and habitable housing for tenants (safe, clean, and fit for human habitation) Notes: (1) Tenant cannot have knowledge of defect and assume risk; (2) Defect must be substantial violation housing code; (3) Claimed defect must have impact safety or health; (4) Tenant must inform LL and allow reasonable time to cure; (5) Tenant can withhold rent (abandonment not required)

Answer 24

All residential leases contain an implied warranty that the leased premises and all areas used in connection therewith are “fit for human habitation and for the uses reasonably intended by the parties”

Answer 25

A contract for the sale of any real property or an interest therein is void unless the contract is in writing subscribed by the party to be charged

Answer 26

(1) be signed by the party to be bound, (2) describe the real estate, (3) and state the price.

Answer 27

May an oral contract for the sale of land be specifically enforced if the party seeking enforcement detrimentally relied on the agreement?) Specific performance of an otherwise invalid contract is available (1) if the party seeking enforcement changed positions based on a reasonable belief that the agreement was valid, and (2) injustice would result if she were not granted equitable relief

Answer 28

An estate or interest in real property, other than a lease for 1 year or less…cannot be created or assigned…unless by operation of law or by a deed or conveyance in writing subscribed by the person creating or assigning the same

Answer 29

In general, title free from chain of title defects and encumbrances.

Answer 30

Who owns the property as a matter of public record (the last recorded title)? (Record title is not dispositive of ownership

Answer 31

Insurance company willing to issue a policy insuring the property

Answer 32

the law assures a buyer a title free from reasonable doubt, but not every doubt…” Title “free of encumbrances and free of any right or interest in a 3rd person which is incompatible with full enjoyment and ownership of the property”

Answer 33

Fraud & Forgery; Mistakes (incorrect legal description; incorrect notarization); Duress, Minors, Incapacity; Authority of a corporation or trustee (ultra vires)

Answer 34

Any right, title, or interest of a 3rd party with respect to a debt (mortgage liens), use (easements and covenants), and/or possession (a lease) affecting the property, and not specifically excluded in the contract of sale or deed Monetary liens (tax liens, judgment liens, mechanics liens, mortgage liens) Possession (leases, tenants in common, other co-tenancies) Use (restrictive covenants, easements) Encroachments (if B’s garage encroaches on A’s land, A’s land might be unmarketable)

Answer 35

If a contract is silent as to delivery of marketable title, there is an implied covenant to deliver marketable title at closing Without modifications of the default rule, all encumbrances (recorded and unrecorded), all liens, easements, restrictive covenants, leases, encroachments (unrecorded) and chain of title defects would render title unmarketable

Answer 36

In the absence of a contract provision, the violation of the zoning ordinances and violation of restrictive covenants encumber title and expose the buyer to the hazard of litigation, making title doubtful and unmarketable Seller covenants to deliver marketable title (Default; BUYER FRIENDLY) Seller covenants to deliver marketable title, subject to all encumbrances of record Seller covenants to deliver marketable title, subject to all encumbrances Seller covenants to deliver marketable title, subject to all encumbrances, even if violated (SELLER FRIENDLY) Note: Never argue breach of marketable title after the closing; claims after closing are brought under deed warranties!

Answer 37

After contract of sale is signed (executory period), equity considers the buyer to be the person with a real property interest in the property. The seller has a personal property interest in the proceeds of sale (right to funds/payment) Equitable conversion addresses risk of loss and characterization issues

Answer 38

When the buyer accepts deed at closing, the buyer is deemed to be satisfied that the seller has complied with all his contractual obligations. The contract promises “merge” into the deed and the deed becomes final act of parties expressing the terms of their agreement. The deed may contain covenants or not.

Answer 39

To effectuate a transfer of real property there must be a writing signed by the parties, delivery of the writing, and acceptance Whether there is an enforceable promise depends on what kind of deed was delivered Notes on Deeds & Recordation: Acknowledgement is not required to make deed effective between seller and buyer. But, acknowledgement is required to record; Recordation of deed is not required to make deed effective between seller and buyer; Recordation is strongly recommended as the grantee will benefit from the protections of the recording statutes vis a vis other third parties (more on this later!)

Answer 40

Includes the present covenants of seisin and no encumbrances, and the future covenant of quiet enjoyment

Answer 41

Grantor Covenants that: Grantor has not done or suffered anything whereby the Premises have been encumbered in any whatsoever except as follows… This warranty/covenant only applies to the acts of the grantor or allowed by the grantor Even if involuntary or grantor has no knowledge (i.e., tax liens; party in possession) Does not cover acts of predecessors

Answer 42

Grantor makes no warranties or promises Deed is an instrument of conveyance only (“I hereby grant”)

Answer 43

These covenants speak to the moment in time that the seller is delivering the deed to the seller (closing)

Answer 44

Seller owns and possesses land in quality/quantity as stated Seller in possession or has right to possession

Answer 45

The land is free from encumbrances, except… Marketable title is a condition precedent to closing; after closing, all promises are deemed performed and the contract of sale is merged into the deed. If buyer discovers a chain of title defect after closing, they must sue under breaches of the deed covenants

Answer 46

If a present covenant is breached, it must be breached at closing If a present covenant isn’t breached at closing, then it will never be breached Therefore, the clock for statute of limitations purposes begins when the deed is delivered (i.e., when the promise is made)

Answer 47

If breached, future covenants are always breached in the future (not at closing)

Answer 48

Grantee will not be disturbed in possession and enjoyment of property by another asserting superior title Requires dispossession (similar to Covenant of Quiet Enjoyment in LL/T Law) Grantee must first be in possession to be dispossessed Notes on Future Covenants: Covenant of Quiet Enjoyment is a Real Covenant (similar to LL/T Law) Covenant runs with the land (i.e., the covenant benefits “remote grantees”)

Answer 49

Mere existence of paramount title does not constitute a breach of this deed covenant

Answer 50

A remote grantee does not benefit from a present covenant made by a remote grantor. Since present covenants, if breached, are breached at closing, upon the remote grantor’s delivery of the deed, the immediate grantee of the remote grantor holds only a chose in action. Under common law, a chose in action was not assignable to a 3rd party

Answer 51

Present covenants run with the land. The moment the deed is delivered, it ripens into a cause of action which is impliedly assigned to a remote grantee

Answer 52

First in Time is First in Right If O conveys to A and then O conveys the same property to B, both conveyances are valid At common law, A is first in time and therefore has a superior right to the property Note: the “loser” might have a potential claim against O under a deed covenant and can seek relief from courts of equity

Answer 53

The term conveyance includes every written instrument by which any estate or interest in real property is created, transferred, mortgaged, or assigned, or by which the title to any real property may be affected; except a will, a lease for a term not exceeding three years, an executory contract for the sale or purchase of lands

Answer 54

In a race jurisdiction, the first to record wins The relevant moment is that of the first recordation

Answer 55

In a notice jurisdiction, subsequent purchasers for a valuable consideration and without notice of the prior conveyance prevail, unless the prior conveyance was recorded (that would impart record/constructive notice) A prior conveyance is void against a subsequent, bone fide purchaser without notice unless the prior conveyance was recorded The relevant moment is the subsequent conveyance (everything afterwards is in the “box of ignorance”)

Answer 56

In a race-notice jurisdiction, a prior conveyance not recorded is void against a subsequent purchaser in good faith and for a valuable consideration from the same vendor, and whose conveyance is first recorded. Notice can be Actual Notice or Constructive Notice (Record & Inquiry) BFP is a purchaser who pays value/consideration (not gifts/donees) and a good guy (innocent, in good faith; without notice)

Answer 57

In a notice jurisdiction ONLY, a party that would otherwise not be entitled to the benefit of a recording statute because of the recordation of a prior conveyance, is sheltered from such record notice, and may avail himself of the same benefit their predecessor grantor enjoyed Note: There is no reverse shelter rule; there is no imputed actual notice Exceptions: Not all recorded deeds constitute constructive notice

Answer 58

Mother Hubbard deeds are effective to convey However, unless there is actual notice, Mother Hubbard deeds are not valid against bona fide purchasers, as they do not give constructive notice, even if Mother Hubbard deed is recorded There is only constructive notice if description is recorded

Answer 59

Wild deeds are not effective to give record notice All deeds in the chain of title must be recorded With grantor/grantee index, grantee would search from the “common grantor”; only applies in jurisdictions using a grantor/grantee index

Answer 60

Mortgages are treated the same as conveyances If the mortgage is properly recorded (and not subject to a recording statute) then a subsequent purchaser buys a property subject to the existing mortgage If the mortgage is not recorded, a subsequent purchaser owns the property free and clear of the mortgage

Answer 61

If a lease is recorded or T is in possession, a buyer owns a property subject to lease (first in time, first in right) and cannot use the recording statute to void the lease; sale does not sever the privity of contract or estate Leases under 3 years cannot be recorded, but if T is in possession, such possession imparts inquiry notice Real covenants run with the land; buyer is obligated to perform covenants in original lease